President Trump said at his press briefing yesterday that his administration is potentially considering extending the current moratorium on federal student loan payments. “We… suspended student loan payments for six months, and we’re looking to do that additionally and for additional periods of time,” he said. Trump provided no further details.
Congress had suspended all payments, interest, and collections on government-held federal student loans for six months under the CARES Act, which was enacted in April. That student loan relief expires at the end of September.
House Democrats passed legislation extending that relief for an additional 12 months, but Senate Republicans have opposed that measure. Instead, Senate GOP leaders just unveiled a new stimulus package that includes no additional extension of existing student loan relief.
In March, however, prior to the CARES Act’s passage, the Trump administration had enacted a temporary emergency interest freeze and payment suspension on government-held federal student loans. The President did this via executive order following his national emergency declaration in response to the Coronavirus pandemic. Congress subsequently codified that student loan relief in statute when it passed the CARES Act, and it also extended those protections for several more months (to September 30) than the President’s initial executive order had allowed.
With further student loan relief in doubt following the Senate GOP’s unveiling of its stimulus package, despite the ongoing pandemic and economic devastation, it is possible that if Congress cannot reach a compromise, the Trump administration could act unilaterally and enact a new executive order extending the existing student loan payment suspension and interest freeze. With the CARES Act’s provisions expiring on September 30, millions of student loan borrowers will get billed merely days before the November elections. That is a potentially powerful incentive for lawmakers — and the President — to act.
The Trump administration already has a blueprint for such an extension. The HEROES Act, which the House passed in May, extends the existing student loan protections for 12 more months, and would expand those protections to include commercially-owned FFEL-program loans and Perkins loans. In addition, a Republican congressman introduced legislation extending student loan relief through December 31, 2020. While this three-month extension is far shorter than the 12-months suggested by House Democrats, it would get the administration through the election, and effectively punt any further relief to the next Congress.
Meanwhile, talks in Congress continue over a possible compromise stimulus package, but there are, for now, no signs of real progress.